Entrepreneurial Design and the Ecology of Market Affordances

by Ian Gonsher and Iain MacKenzie

In design, an affordance is a relationship between a user and an object or environment that provides possibility for a behavior. The classic example of an affordance is a doorknob, which affords twisting and opening. The design of the knob has a direction of fit with the human hand, just as the size of the door fits a human scale, creating a space to walk through. But an affordance is more than just the physical fit of an object or environment to the body. An affordance is what a subject perceives to be possible. It is the opportunity space that a design creates. A doorknob suggests its function without requiring the user to even think about it. It indicates its function through its form. In this way, affordances are both cognitive and physical; they constrain behaviors towards action, as they create the potential for that action to occur.

Psychologist J.J.Gibson coined the term in the 1950s. He describes affordances in the following way:

“The affordances of the environment are what it offers the animal, what it provides or furnishes, either for good or ill. The verb to afford is found in the dictionary, but the noun affordance is not. I have made it up. I mean by it something that refers to both the environment and the animal in a way that no existing term does. It implies the complementarity of the animal and the environment.” (Gibson,127)

He further elaborates that an affordances is…

“…neither an objective property nor a subjective property; or it is both if you like. An affordance cuts across the dichotomy of subjective-objective and helps us to understand its inadequacy. It is equally a fact of the environment and a fact of behavior. It is both physical and psychical, yet neither. An affordance points both ways, to the environment and to the observer.” (Gibson,129)

The term was adopted and popularized in the 1980s by one of Gibson’s students — Don Norman — with his seminal work on affordances, “The Design of Everyday Things”. It has since been adopted by a generation of designers who use the term to help think about ways to create better cognitive and physical fits between the user and the products and services they create. Norman encouraged designers to think carefully about how users discovered and used the things around them. This attention to context, and the way the user navigates and engages with that context, is one of the most important skills a designer can possess. It also happens to be essential to entrepreneurship.
 
The entrepreneur’s task, like that of the designer, is to create positive benefit for people; benefits which fit within the context of the market. This benefit must satisfy a need as it provides some new capability. The utility of new products and services are dependent first and foremost on the ability of the consumer to understand, access, and use them. The value created is a direct function of both the user experience and the market conditions that this experience is situated within.

In recent years, the term “niche” has found its way into common business parlance. Gibson anticipated its usage in his “Theory of Affordances”, in which he explores the design of niches within ecosystems as a metaphor for the concept of affordances. He elaborates on the concept in the following way:
 
 Ecologists have the concept of a niche. A species of animal is said to 
 utilize or occupy a certain niche in the environment. This is not quite the 
 same as the habitat of the species; a niche refers more to how an animal 
 lives than to where it lives. I suggest that a niche is a set of affordances. 
 
 The natural environment offers many ways of life, and different animals 
 have different ways of life. The niche implies a kind of animal, and the 
 animal implies a kind of niche. Note the complementarity of the two. But 
 note also that the environment as a whole with its unlimited possibilities 
 existed prior to animals. The physical, chemical, meteorological, and 
 geological conditions of the surface of the earth and the preexistence of 
 plant life are what make animal life possible. They had to be invariant for 
 animals to evolve. 
 
 There are all kinds of nutrients in the world and all sorts of ways of getting 
 food; all sorts of shelters or hiding places, such as holes, crevices, and 
 caves; all sorts of materials for making shelters, nests, mounds, huts; all 
 kinds of locomotion that the environment makes possible, such as 
 swimming, crawling, walking, climbing, flying. These offerings have been 
 taken advantage of; the niches have been occupied. But, for all we know, 
 there may be many offerings of the environment that have not been taken 
 advantage of, that is, niches not yet occupied.
 
 In architecture a niche is a place that is suitable for a piece of statuary, a 
 place into which the object fits. In ecology a niche is a setting of 
 environmental features that are suitable for an animal, into which it fits 
 metaphorically.(Gibson, 128–129)
 
For the investment community, the term “niche” often comes with baggage. It implies a small addressable market and restricted opportunities for expansion. At worst, it confers limited aspirations to the companies and founders that pursue these markets. “Niche” may also connote a level of hyper-specialization that is restrictive to growth beyond the confines of that initial market. That’s a problem. These views position “niche market” as an end-point and not as a beachhead or a critical test-bed. Niche does not mean small; it means focused. 
 
But by reversing the construction of the term “niche market” to “market niche” we imply a shift in emphasis, suggesting that niches can be understood as subsets of existing markets that are potentially scalable and disruptive to existing markets over time.

In the natural world, the apparent stability of an ecological niche is more the result of a dynamic tension than some inherent stasis. It highlights the difference between what ecologists refer to as the fundamental and realized niche. The fundamental niche is resource based: it determines where, in isolation from other competitors, a species has potential to thrive. Things like nutrient availability, temperature regime, amount of available sunlight, soil moisture help define a fundamental niche. However the realized niche takes into account the competitive environment and recognizes that most species occupy a niche that is more constrained by the activity of other species than that of the resource-based, fundamental, niche.

We can apply this analogy of fundamental and realized niche to the development of market affordances. A market affordance is the potential for consumer behavior within a given set of market conditions. If we look at a basic opportunity space we can consider that as akin to the ecological concept of fundamental niche: the possible niche defined and described by resources and conditions. However, as with ecological niches, few if any opportunity spaces constitute true “white space”. As we look closer they are crowded, cluttered, and hemmed in by competitive solutions attempting to occupy common space. The challenge then is to identify and create a realized niche space for a new product or service. Design strategies, such as Human-Centered Design, are useful frameworks for exploring and pushing the boundaries of an opportunity space. Out of these creative processes, which concretize the abstract, we can expect a deeper understanding of the realized niche or realized opportunity space.

We can imagine the iterative prototyping, testing, and refinement that designers engage in as analogous to the evolutionary processes found in the natural world. Evolution is a process of iterative “prototyping” and refinement by natural selection. It is a force that can squeeze a newly realized niche into a highly competitive fundamental niche. This is a scenario that many start-ups face. The question the entrepreneurial designer faces is, how might we squeeze a new realized niche into a crowded, noisy, market?

Here we have a tension again with the affordances of an opportunity space and the constraints of a competitive market. If we focus, as many business schools do, simply on competitive landscape analysis we might easily conclude that a space is too crowded. Or if we perform a matrix analysis looking at the existing companies in the area of interest we might miss an opportunity. Using design principles to strip away the competitive overlay (if only temporarily) and focus on what the underlying fundamental niche affords is a crucial tool in creating new value.

The Evolution of a Market Affordance Through Iterative Design

To better understand how market affordances might be applied to entrepreneurship, we can draw on the creative strategies such as Human Centered Design. Human Centered Design is a creative process focused on the user experience and the context that this experience emerges from. It is a process by which designers design with, rather design for, the user. These tools allow designers to better empathize with the consumer experience in order to provide products and services that produce greater value for stakeholders and are appropriate for the context they exist in.

Iterative prototyping is not dissimilar to the process of evolutionary development one finds in nature. Iterative prototyping, when done in a quick and lean manner over many generations can produce new fitness within given market conditions. Within markets, as in the natural world, a product evolves towards its context. Design strategies provide the entrepreneur means by which they might engage in critical reflection with each iteration, providing the necessary knowledge to adapt a new product to its environment. Small, incremental changes can aggregate to the creation of new niches or even entirely new ecosystems — sometimes in counterintuitive or unexpected ways.

The Spandrels of San Marco and Beaver Dams

The evolutionary biologist Stephen Jay Gould leveled a withering critique at the almost dogmatic application of natural selection to explain any feature of a living organism. He argued in, “The Spandrels of San Marco and the Panglossian Paradigm: A Critique of the Adaptationist Programme”, that certain features were byproducts of selection on other physical traits, rather than actual evolutionary adaptations themselves. One of his points was that evolution by natural selection frequently spins off byproducts — some of which were useful, some of which were not. Famously he used an architectural example to explain the concept:

Visitors to St. Mark’s Basilica in Venice discover majestic vaulted domes covered in mosaics. Below these domes, between the arches that transfer the dome’s weight to the ground, neatly fit triangular surfaces. In architectural parlance these inverted triangular spaces are referred to as “spandrels” (or pendentives, if you like). The interior of the basilica is beautifully decorated with a program of visual storytelling. In the corners, on the “spandrels”, artists depicted glowing scenes in mosaic that are an elegant use of the space. There are angels in the pendentives; heaven rendered in the dome above. One might imagine, as many of the tourists who visit St. Marks each year do, that the spandrels were conceived to display these images, that they were intended for that particular function. But Gould argues against this; spandrels, in his view, are an architectural necessity for mounting a domed roof on four arches. He argues that the spatial affordance made available for the images are a byproduct of this. These spaces weren’t designed as surfaces for mosaics. The space created by the architectural necessity of the spandrels afford an opportunity for expression.

This argument remains highly contested in the biological literature. However, the contours of the argument are relevant to our discussion of entrepreneurial design and our understanding of market affordances. The takeaway is this: sometimes it is the second order, interstitial spaces that afford opportunities for new value and utility to emerge. Design strategies often create encounters that can be further explored, developed, and expanded upon. These sometimes unanticipated, often unrecognized insights are the raw material for the creation of new value. The trick is to be attentive to recognizing these “spandrels”, “niches”, and “opportunity spaces” in the market environment.

Niches are not static, and as described previously, there is rarely unoccupied blank space in the natural world. Through the process of natural selection organisms have adapted to take advantage of various niche environments. Yet, some species go even further than adaption or exploitation. Some species create entirely new niches as byproducts of their behavior.
 
 North American Beavers are a classic example. Beavers build dams; and in doing so they convert running streams into ponds. Beavers build dams for two main reasons. The first is so they have a calm, protected body of water within which to construct a lodge. The second because beavers are vulnerable to predation while on land — yet they must forage for food (soft-wood branches like willow and aspen) while on land. A beaver caught far from a pond is a tasty lunch for a fox, coyote, or wolf. So beavers build ponds so that they can forage on land while remaining close to the safety of the water. As they consume the best trees on the edge of the pond they build the dam higher — the pond expands and they can safely forage for new trees to a bit deeper into the wooded margin of the pond.

Why is this feature of beaver ecology interesting to the entrepreneurial designer? Well, beavers are an interesting example of a species that modifies their environment. In doing so they create new niches, new affordances for other species to occupy and expand upon. The newly created beaver pond transforms the river or creek environment into a home for cattails, water lilies and duck-weeds; all species that are rarely found in a creek environment. Like angels on pendentives, the water lilies adhere to the surface of the still water. The pond creates an affordance for this. After a while, frogs move into this newly created pond and in turn, this affords Great Blue herons to wade through the margins looking for food. None of these pond species would have been found in the old environment (the creek) before beavers modified the site with the construction of a dam.

If we extend this line of thought to entrepreneurial design we find that the creation of one new niche has the added benefit of sometimes spinning-off new niches and unforeseen affordances.

Conclusion

The idea of affordance can be traced back to the psychology literature from the 1950’s. Since then the concept has been applied and widely adopted by the design community. We propose an extension of this concept by applying the idea to the market. The entrepreneur — or what we might call the “entrepreneurial designer” — can learn much from the creative strategies of designers and psychologists who examine the ways behaviors manifest and concretize themselves in a given opportunity space. Entrepreneurial designers iteratively explore the kinds of new products or services a market might afford. They ask how those markets might evolve into something new.

Gibson, J.J. (1977). The Theory of Affordances (pp. 67–82). In R. Shaw & J. Bransford (eds.). Perceiving, Acting, and Knowing: Toward an Ecological Psychology. Hillsdale, NJ: Lawrence Erlbaum.
 
 Don Norman. The Design of Everyday Things(Revised and expanded ed.), New York: Basic Books. 2013. Print.
 
 Stephen Jay Gould and Richard C. Lewontin. “The Spandrels of San Marco and the Panglossian Paradigm: A Critique of the Adaptationist Programme” Proc. Roy. Soc. London B 205 (1979)